Ch. 14 Case Study: What Went Wrong with Maine's New Medicaid System?

1. How important are information systems for Maine’s Department of Health and Human Services? Analyze the impact of its faulty Medicaid claims processing system.
Information systems are very important for Maine’s Department if Health and Human Services. Over 260,000 residents depend on this service. Information systems themselves are very important to the storage of private information. The transfer of information and dealing with all the specifics of codes regarding the laws and systems implemented by the government. Over 100,000 Medicaid claims per week must be managed by these information systems, they are crucial to the organization.
The impact of its faulty Medicaid claims processing system was vast. Millions of dollars of claims were withheld due to system error. The system was holding back approving claims and with it came over 300,000 frozen claims in the first two months. The system would send checks to doctors for the entire amount billed versus the Medicaid amount. In total this mishap cost the state 30 million dollars.

2. Evaluate the risks of the Medicaid claims processing system project and key risk factors.
The risks of the Medicaid claims processing system project were due to many factors. One of which was a lack of expertise from the contracting companies hired by the state. The other issues were lack of preparedness and security systems created for the software. This resulted in costs to the state and much inconvenience to many people. The risks involved with health care information systems are very serious. Confidential information must kept safe, billings and services rendered must be accurate and truthful, and payments must be accounted for and supplied by the state for the persons on Medicaid.

5. If you were in charge of managing this project, what else would you have done differently to increase chances for success?
If I were in charge of managing this project, in addition I would have attempted to increase the chances for success by hiring consultants from well-known high profile organizations whom have experience in such systems. I would communicate with other states and see how they have implemented their systems and what security measures they have in place. I would do all that I can to ensure the likelihood of success and in the case of a faulty system, I would have measures in place to fix the issues as soon as possible.

Sources: Management Information Systems Managing the Digital Firm, tenth edition. pgs. 589-591. Laudon, Kenneth C.